CoPS/IMPACT Working Paper Number G-180

Title: Enhancing Agriculture and Energy Sector Analysis in CGE Modelling: An Overview
of Modifications to the USAGE Model

Authors: R. Ashley P. Winston

Abstract

This paper describes some key developments to USAGE, a dynamic computable general
equilibrium (CGE) model of the US economy, aimed at enhancing its utility in agricultural
and bio-fuels/bio-energy analysis.

The USAGE model is a large-scale dynamic CGE model of the US economy developed by the
Centre of Policy Studies at Monash University in collaboration with the US International
Trade Commission (USITC), and has been updated and modified for this study with
assistance from the Economic Research service of the US Department of Agriculture
(ERS-USDA). Additional sectoral detail and theory are developed and applied to USAGE,
including a detailed modeling of land use in US agriculture involving 72 types of land,
the explicit modeling of TRQ policies and by-product biomass supply (such as crop
residues) using nested complementarity relationships, and careful accounting for
subsidies in US ethanol production and their effects on public revenue streams.